Thailand's future monetary policy tightening would be gradual - central bank minutes

[webfact]

Thailand's future monetary policy tightening would be gradual - central bank minutes

 

FILE PHOTO: Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand in this April 26, 2016. REUTERS/Jorge Silva/File Photo

 

BANGKOK (Reuters) - Thailand's monetary policy committee expects any future policy tightening would be gradual after the central bank's first rate hike since 2011 in December, minutes from its last policy meeting showed on Wednesday.

 

The Bank of Thailand's policy committee voted 5-2 to raise the one-day repurchase rate <THCBIR=ECI> by 25 basis points to 1.75 percent, to curb risks to financial stability.

 

After the increase, the rate is still only 50 basis points above its all-time low.

 

The committee viewed that "accommodative monetary policy would remain appropriate in the period ahead, and that the policy rate increase would be gradual and not in a continuous manner as in the past," the minutes said.

 

The MPC will next review policy on Feb. 6, and most analysts expect no policy change.

 

After the December hike, the committee viewed that "the policy rate at 1.75 percent would remain accommodative and conducive to growth across economic sectors," they said.

 

The committee thought the economy was strong enough to handle the rate increase, despite a moderation in growth.

 

The two dissenting members who voted against the hike argued that accommodative monetary policy remained necessary to support economic growth.

 

At the December meeting, the central bank cut its 2018 economic growth forecast to 4.2 percent from 4.4 percent and lowered its 2019 estimate to 4.0 percent from 4.2 percent.

 

Growth in 2017 was 3.9 percent, the best in five years.

 

For the full minutes: https://www.bot.or.th/Thai/MonetaryPolicy/MonetPolicyComittee/ReportMPC/Minute_N2/MPC_Minutes_82018_jr0ijjmq.pdf 

 

(Reporting by Orathai Sriring; Editing by Sam Holmes)

 

-- © Copyright Reuters 2019-01-02

[RichardColeman]

Thought Thailand just lent billions in cheap loans - if thats any indication of gradual they are in trouble

[Srikcir]

1 hour ago, RichardColeman said:

Thought Thailand just lent billions in cheap loans - if thats any indication of gradual they are in trouble

Making cheap loans domestically and cutting tax revenue for populist programs while borrowing from China at above "sovereign" rates for transportation projects because of economic risks.

Not a very good combinations of fiscal planning.

[Srikcir]

22 hours ago, webfact said:

Growth in 2017 was 3.9 percent, the best in five years.

Which five years ago was the since overthrow the Yingluck government by the pro-military/junta forces.

Perhaps instead of disrupting economic growth of 2012, the nation might have continued its annual growth rate and by today seen at a modest 3% annual growth rate to an overall 15% increase in GDP instead of resetting back to the 2012 GDP growth rate.

NCPO's accomplishment: We burnt down the economic house of Thailand and rebuilt it back to its original condition.

Kudos!

[Eric Loh]

The idiom “cut your nose and spite your face” fits well with Thailand’s economy. Thrice the country on the right trajectory for growth to become a tiger economy and only to be wrecked by 2 coups and street chaos.